What You Need To Know About Condominium Insurance
In Southern California, owning a “condo” is very popular and in many cases a more affordable way to own your home. California home insurance is a bit different then condo insurance due to the nature of the structure, but what about the insurance on your condominium? Is it the same as insuring a single family home? Let’s take a quick look at the key element necessary to insure your condo correctly.
First things first. It’s important to know that a condominium is not a specific kind of building, but a form of ownership. It can be in the form of a townhouse, a converted apartment, maybe in a high-rise building, or a free standing dwelling. The word “Condominium” is a Latin word meaning joint ownership or control. So in terms of housing, it denotes individual ownership in a multi unit project, with land and all other parts of the project held in common with the owners of the other units.
It is crucial to understand what you are responsible to insure, and to do that, you will need to look carefully at the master policy held by your homeowner’s association. It will spell out the details of who insured the common areas (garages, sidewalks, swimming pools). And it spells out what you are responsible to insured in your unit as well. These policies range from the unit owner being responsible for everything in the unit from the unfinished walls inward, or, only for the personal property you own and any additions done to the unit after purchase.
The key to this coverage is making sure you protect your personal property with a condo-owners policy. This covers your personal property (with some limitations) based on a value that you determine on a replacement cost basis. This policy will also cover any upgrades to the interior of the unit as well, but you must add this onto the policy by endorsement. For example you put in granite countertops, or upgraded carpet. You will need to protect the value of these items in your policy.
Finally, loss assessment coverage may be needed as well. Most associations in their by-laws contain provisions to assess each unit owner with a proportionate share of property losses and liability claims, when the master policy does not cover the loss. Most policies carry $1000 coverage, but you will want to increase this limit on your policy. And if you rent out your unit, then the coverage would change once again, to protect the upgrades to the property, loss of rental income, and liability for the unit itself.
This is a quick overview of the condo insurance policy. Please contact your agent to review this coverage in detail and make sure you have the proper coverage with the right limits where needed.
Written by: Gary Remland
